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Michele Marzola Vice-President, IBM Global Services Cape Town, May 17, 2005 PowerPoint PPT Presentation


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Automated Meter Management Starts from pre-payment the transformational journey of African Utilities. Michele Marzola Vice-President, IBM Global Services Cape Town, May 17, 2005.

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Michele Marzola Vice-President, IBM Global Services Cape Town, May 17, 2005

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Michele marzola vice president ibm global services cape town may 17 2005

Automated Meter ManagementStarts from pre-payment the transformational journey of African Utilities

Michele Marzola

Vice-President, IBM Global Services

Cape Town, May 17, 2005


Michele marzola vice president ibm global services cape town may 17 2005

In the World, Utilities and Regulators are facing four different challenges depending on the local economic scenario

Increase Demand Efficiency

And Reduce Outages

Domotics Integration

Economy

growth

Eradicate Frauds, Thefts and Bad Payers

Peak Shaving and Creation of Retail Competition

GDP per

capita

Cape Town, May 17, 2005


Automatic meter management amm helps dealing with all four issues at the same time

Automatic Meter Management (AMM ) helps dealing with all four issues at the same time

Increase Demand Efficiency

And reduce Outages

Domotics Integration

Economy

growth

AMM

Eradicate Frauds, Thefts and Bad Payers

Peak Shaving and creation of Retail competition

GDP per

capita

Cape Town, May 17, 2005


Amm creates an intelligent network with bi directional communication

AMM creates an Intelligent Network with bi-directional communication

Integration with SAP and creation of a powerful new series of applications handling customer management and energy efficiency

Data Communication Centre

Two-way communication with all customers

MV/LV

Substation

Intranet

Concentrator

New services,

including broadband

options

Meters

Customer Portals available for

users, regulator and retailers

A completly new network

of intelligent meters

Cape Town, May 17, 2005


Amm is very distinct from amr and drives the transformation of the distribution business

AMM is very distinct from AMR and drives the transformation of the Distribution business

Slows Down and Minimise the benefits of AMM

AMM

(Benefits extended to:

  • Remote customer mgmt.

  • Energy balance every 15 m.

  • Flexible tariffs and DSM

  • Power modulation

Strategic

(Revenue protection,

Load management,

Competitive Adv)

Client’s

Objectives

AMR

(Benefits limited to

more efficient reading)

AMR does not have sufficient

capabilities to

transform the Business

Tactical

(Meter reading efficiency)

Evolution

Transformation

Implementation approach

Cape Town, May 17, 2005


Michele marzola vice president ibm global services cape town may 17 2005

AMM will transform the Utilities Industry by the end of this decade. Utilities adopting AMM will be able to...

  • Execute customer requests in a few minutes....

  • Provide customers with precise, actual bills which contain a rich history of their consumption, with suggestions on how to improve energy efficiency....

  • Design bespoke contracts which apply rates in synch with the actual cost of energy and the price sensitivity of each customer...

  • Accept new customers with just a phone call or an internet message, without any need of phisical intervention of new meters....

  • Reduce outages by one order of magnitude...

  • Eradicate thefts and frauds...

  • Manage bad payers with both social responsibility and business integrity

  • Provide Regulators evidence of service rendered to each customer....

  • Provide Regulators and Government the evidence of energy saved through the elimination of frauds, thefts and the smoothing of peak demand...

  • AND ALL OF THE ABOVE AT HALF OF THE CURRENT OPERATING COSTS !!

Cape Town, May 17, 2005


Amm will help african utilities to reduce the cost of commercial losses

AMM will help African Utilities to reduce the cost of commercial losses

Source: World Bank

Cape Town, May 17, 2005


Commercial losses require different approaches for different customer segments

Commercial Losses require different approaches for different customer segments

AMM enables flexible rates and can help people to pay, also using pre-payment functionalities

AMM avoids wrong

billing and

creates new services

opportunity

YES

Willingness to Pay ?

AMM permits to identify

endemic leaks

and help dealing with

the political issues

of these customers

AMM permits to identify

key losses and

provides ways

to bring

behaviours back to law

NO

NO

YES

Can Afford to Pay for Energy?

Cape Town, May 17, 2005


The eradication of commercial losses requires a systemic approach

The eradication of Commercial losses requires a systemic approach

AMM enables flexible rates and can help people to pay, also using pre-payment functionalities

AMM avoids wrong

billing and

creates new services

opportunity

Introduction of flexible pre-payment

Elimination of faulty meters

YES

Willingness to Pay ?

AMM permits to identify

endemic leaks

and help dealing with

the political issues

of these customers

AMM permits to identify

key losses and

provides ways

to bring

behaviours back to law

Identification of by-passes

Elimination of tampered meters

NO

NO

YES

Can Afford to Pay for Energy?

Cape Town, May 17, 2005


Michele marzola vice president ibm global services cape town may 17 2005

Peak Tariff (Seasonal) ??

Low Tariff

Peak Tariff

Low Tariff

AMM will introduce flexible rates and enable Demand Side Management

AMM records individual load profiles with 15 minutes intervals

AMM permits to bill the real value of energy with dynamic adjustments any 15 minutes

AMM introduces the very innovative capability to curtail the power supplied to specific customers at any time

AMM enables the design of tariffs for optimal energy usage

Cape Town, May 17, 2005


Michele marzola vice president ibm global services cape town may 17 2005

Up to 80 € of saving per Customer p.a.

New tailored tariffs permit savings of more than $ 100 per annum to customers willing to move their consumption patterns

3 kW

Sat Sun

Mon

Tue

Wed

Thu

Fri

Sat

Sun

Mon

Tue

Wed

Thu

Fri

0:00

Price:

-22%

19:00

Price: -16%

1:00

24:00

minimum “Blu time” consumption: 26%

minimum “Blu time” consumption: 26%

Cape Town, May 17, 2005


Michele marzola vice president ibm global services cape town may 17 2005

Both Utilities and the customers will benefit from the much easier pre-payment process enabled by AMM

More personal financial planning options for the customer

Credit updated in Billling system

Consumption path for a pre-paid card

  • Examples of possible pre-payment systems

    • Bank transfer, ATM

    • Cheque

    • Debit or credit card through call center

    • Pre paid through mobile phone

    • Cash through supermarket collection

    • Vending (including kiosk in post offices, etc.)

    • POS device on the electronic meter

Area

=

Anticipated cash

Curtailment process for bad payers

More payments options for the customer

Cape Town, May 17, 2005


The massive installation of new electronic meters creates a fraud free installed base

The massive installation of new electronic meters creates a fraud–free installed base

Customer Information System

  • Consumption reading

  • Meter’s picture

  • Expected consumption by customer type and builling history

  • Asset description (n.a.)

Information system (AMM)

  • Final report:

  • Consumption database update

  • Type and number of illegal situations

  • Connections ageing

  • Meter initialization

Meter data

repository

Network asset monitoring

Platform standardization

New meters are precise

Fraud meters are removed

Illegal connections are eliminated

Ageing assets replaced

Standardized meters and meters boards

Up to date meter database built

Illegal connections removed

Asset renewal

Cape Town, May 17, 2005


Once operational amm permits to have constant monitoring of energy distribution yield

Once operational, AMM permits to have constant monitoring of energy distribution yield

Meters

MV/LV

Substation

Concentrator

ENERGY BILLED

Technical Losses

(Joule effect, ...)

(Mathematical models)

Energy Balance every 15 minutes

(Syncronous reading between meters and transformer

Total Energy Invoiced

Commercial Losses

  • Theft

  • Fraud

  • Wrong measurement

Cape Town, May 17, 2005


Already during the first weeks of operations the quantum leap in energy efficiency can be measured

Energy billed

Other losses

Technical losses

Already during the first weeks of operations the quantum leap in energy efficiency can be measured

Sistematic meter replacement removes all types of frauds at time 0

Kwh injected in the grid

100 %

Asset renewal will reduce technical losses

Revenue OK !

90%

time

0

New meters installation

Cape Town, May 17, 2005


Michele marzola vice president ibm global services cape town may 17 2005

MV

meter

Only a complete AMM roll-out will permit to control the full energy balance, with the capability of detecting any new fraud attempt

MV

meter

Detected unbalance

LV

Detected leakage

Detected leakage

LV

Dedicated substation apparent yield can already be calculated

tampering

MV meter starts calculating user load profile

Cape Town, May 17, 2005


Amm is the only systematic solution to eradicate frauds

AMM is the only systematic solution to eradicate frauds

  • “1000 Inspectors with 1000 dogs” can visit any account at least once a year..

    • If they were to know where to go...without political biases

    • If they are let in...

    • If this does not create political repulsion against the Utility....

    • Frauds can be reinstalled a day after the visit...

    • Evidence about frauds may be insufficient to recover past losses

    • ....and why could not the readers execute this fraud eradication program before?...

    • ..and would anyone replace a dum old electromechanical meter with a new, still dum, electromechanical meter bound to be tampered soon?

  • ...but the cost of this program would waste more than half of the benefits, besides requiring € 6 per meter (per annum?) to renew the assets

  • AMM will insure a continuous monitoring of energy efficiency, with an auditable track record of consumption patterns and would also help to improve the technical losses, besides eradicating the commercial losses

Cape Town, May 17, 2005


Michele marzola vice president ibm global services cape town may 17 2005

Minimum allowed for key social reasons

-40%

-60%

-80%

The curtailment functionality of AMM ensures minimum social supply to all, instead of outright cut-offs

-20%

Power allowed

Increasing shortage of supply brings to a selective stop of home appliances

Full power availability

Illustrative Example

Cape Town, May 17, 2005


Amm permits to monitor the availability of the distribution grid

AMM permits to monitor the availability of the distribution grid

Concentrator

(CBT)

AMM

Telegestore

GSM Network

Concentrator

(CBT)

GSM Network

Concentrator

(CBT)

GSM Network

Cape Town, May 17, 2005


And transforms the way to handle critical situations

..and transforms the way to handle critical situations

IMPACT OF THE HEAT WAVE IN SEVILLA IN 2004

  • Generation capable of coping with increased demand

  • However, the capacity of two large transformers was stretched to the limit until they burn out

  • The black-outs following this event caused disruptions evaluated to exceed $ 650 M

  • AMM could have curtailed demand and balanced the throughput of the two transformers, avoiding a major capital loss, insuring continuos services and sparing two weeks of havoc to a major town

Cape Town, May 17, 2005


Amm creates benefits for all stakeholders

AMM creates benefits for all stakeholders

Utilities benefit from a reduction in customer management processes costs

End user benefits from a better service with more customised tariffs

The Economy benefits from better energy management

Cape Town, May 17, 2005


Michele marzola vice president ibm global services cape town may 17 2005

AMM offers great benefits for customers…

  • No charges made for the new meter, however it is a great opportunity for the utility to upgrade paid-up equipment and services….and rational customers may be willing to pay $ 100 to obtain rate savings

  • Never need to answer the door to a meter reader early in the morning or to wait in all day for one to arrive

  • Able to activate, or change, their energy contract immediately

  • Billing always aligned with actual consumption

  • Information to identify the best tariff

  • Power curtailment will permit most appliances to operate during energy shortage periods

  • A cost-effective gateway into the home for new value added services such as alarm monitoring, fire detection, lighting management, intelligent buildings management

Cape Town, May 17, 2005


And for the wider economy

… and for the wider economy

  • AMM allows economy to grow even with a stalled generation supply

  • AMM will ensure that each kWh of energy is delivered where it is most needed - less pollution

  • Reduce peaks and outages, sustaining economic growth - - The Swedish regulator estimates that AMM will increase GDP by 0.03%

  • Ability to plan network investments according to the real consumption patterns

  • Strong monitoring of network availability and efficiency

Cape Town, May 17, 2005


Michele marzola vice president ibm global services cape town may 17 2005

The return on investment for an integrated distribution company is impressive, with a four years pay-back

Total investments

€ 2,100 millions

Annual savings

  • Savings on purchasing of old meters

  • Field operations

  • Readings

  • Revenue protection (thefts/failures)

  • Other

  • Plus:

  • Accelerated Return on RAB

  • Increased Market Share

  • Increased Bonus for better Service

€ 500M

TOTAL SAVINGS

Cape Town, May 17, 2005


Thanks to amm even the most efficient utilities will be able to cut its process costs by 33

Thanks to AMM, even the most efficient utilities will be able to cut its process costs by 33%

Case Study 2

Compared with

European Average

Meter-to-Cash cost per customer per annum

- 27 %

- 33 %

- 65%

Future

Operating Cost

Total New Net Cost

Baseline

Operating Cost

1

2

3

Cape Town, May 17, 2005


Amm creates a net present value of 105 per customer just out of operational savings

AMM Value Creation (Sample)

AMM Operations

Infrastructure

Revenue Protection

$ per customer

Operations

Customer

Management

Network

Benefits

Investments

Net Present Value

AMM creates a Net Present Value of $ 105 per customer just out of Operational Savings...

NPV

$ 105

Cape Town, May 17, 2005


Michele marzola vice president ibm global services cape town may 17 2005

The Value of AMM is in the integration with the operating processes, not in any single component of the technology

Value for the Utility

Business

Process

Outsourcing

Project

Financing

Business

Transformation

Customer

Information

Systems

Renewal

Electronic Meter

Installation

Electronic

Meters

Offering evolution

Cape Town, May 17, 2005


In summary

In Summary......

  • AMM Solutions exist and deliver new important functionalities to Utilities

  • Regulators are highly favouring the adoption of AMM technologies

  • The business cases for a variety of Utilities around the world show a pay-back period between 2 and 7 years, with Net Present Value created per customer up to $500

  • Risks are identified and are manageable

  • The full achievement of AMM benefits requires the integration of the entire solution supported by a full business transformation programme

Cape Town, May 17, 2005


Questions

Questions?

Cape Town, May 17, 2005


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